Strategy & Geopolitics

The Critical Minerals Shock of 2025: One Year in Review

In a single year, the global critical-minerals industry absorbed Chinese

rare-earth export controls, Congolese cobalt quotas, US anti-dumping

duties on Chinese graphite, a 60-percent expansion of Indonesian nickel

capacity and the first Executive Order calling for seabed mining. The

2025 shock restructured the terms of the entire critical-minerals

conversation — and Brazil emerged materially stronger by year-end.¹

The April-October Rhythm

The year's most consequential events clustered into two episodes. In

April 2025, China introduced export controls on seven heavy rare earths,

and the United States simultaneously signed Executive Order 14285 on

seabed mining. That month alone reshaped Western expectations for both

rare-earth supply and future competitive threats to terrestrial nickel.

In October, China expanded its rare-earth restrictions to five

additional elements plus processing equipment, and the Democratic

Republic of Congo imposed cobalt export quotas. Within a single calendar

month, three of the most strategically important critical minerals —

rare earths, cobalt and equipment technology — experienced simultaneous

supply-side interventions.²

The cumulative effect was a structural rethink of supply-chain

assumptions. Western automakers, battery-cell producers, wind-turbine

manufacturers, defence primes and industrial-steel customers all had to

re-examine their sourcing. The prices that emerged in response —

dysprosium at US$250 per kilogram, terbium above US$1,000, European

rare-earth prices up to 6x Chinese levels — provided the commercial

signal that reinforced the policy urgency.

Commodity by Commodity

Rare earths experienced the most dramatic year. Chinese export controls,

U.S. DFC financing of Brazilian Serra Verde at US$465 million, MP

Materials' US$400-million DoD partnership, and Lynas's first-ever

commercial dysprosium oxide production outside China together

restructured the rare-earth industry more thoroughly in twelve months

than the previous ten years combined.²

Cobalt saw Congo's quota experiment reshape pricing and Indonesian HPAL

supply continue to dilute Congolese market power. Nickel saw Indonesian

dominance consolidate further while Australian and Philippine capacity

contracted by 54 and 24 percent respectively, creating a more

concentrated but politically fragile supply picture. Lithium saw battery

demand pass 1.6 TWh while Brazilian Sigma consolidated its position as

one of the world's lowest-cost concentrate producers. Graphite saw U.S.

anti-dumping duties reach 721 percent against certain Chinese exporters,

opening commercial space for Brazilian, Tanzanian and Mozambican

producers. Niobium continued Brazilian dominance at 93 percent of global

output, with the CBMM template now referenced in broader

critical-minerals policy discussions.

Brazilian Positioning at Year-End

By the close of 2025, Brazil had emerged as one of the most

strategically important non-Chinese critical-minerals jurisdictions in

the world. The combination of upstream production growth (Serra Verde

rare earths tripled, Vale nickel expanded, Brazilian graphite climbed

above Mozambique), midstream investment (Viridis-Ionic at Poços de

Caldas advancing, lithium hydroxide projects under evaluation), and

international capital attention (DFC financing, European CRMA

engagement, Japanese partnership discussions) reshaped the country's

standing substantially during the year.

The national policy architecture progressed in parallel. The PNMCE

advanced, the Brazilian Critical Minerals Association was established,

the Nova Indústria Brasil industrial-policy framework treated critical

minerals as priority sector, and the SGB's geological mapping programmes

delivered the technical foundation for next-generation exploration.³

None of these accomplishments was complete at year-end. Each involved

specific projects that had to be executed, specific contracts that had

to be signed, specific regulatory steps that had to be navigated. But

the aggregate trajectory through 2025 was meaningfully more favourable

for Brazilian critical minerals than the trajectory at the start of the

year.

The Policy Response Wave

The global policy response to the 2025 shocks was unusually coordinated.

The G7 Critical Minerals Action Plan, published after the IEA's 2025

Global Critical Minerals Outlook, articulated a shared Western approach

to supply-chain diversification. The European CRMA accelerated its

Strategic Projects designations. The U.S. Inflation Reduction Act's

domestic-content requirements continued to drive battery-supply-chain

reshoring. Japan and South Korea expanded their critical-minerals

financing programmes.

For Brazil, the policy response created direct commercial opportunities.

Trade missions from Europe, the United States, Japan and Korea to

Brazilian critical-minerals projects increased substantially through

2025. Bilateral financing commitments beyond the DFC deal were in

various stages of discussion. And the EU-Mercosur agreement, finalised

during the period, provided a framework for long-term commercial

relationship-building that had not existed for previous generations of

Brazilian mineral exports.

Lessons for 2026

Four lessons from 2025 will shape 2026 strategy. First,

dominant-supplier risk is bigger than pre-2025 thinking assumed. China's

ability to move markets with licensing decisions, Congo's ability to

impose quotas, and Indonesia's ability to flood supply are all

demonstrated commercial facts now.

Second, the pace of response is faster than historical precedent. The

2025 coordination of policy, capital and industrial response was

unusually quick by mineral-industry standards. Whether that pace

sustains into 2026-2030 will determine whether the supply-chain

rebalancing actually achieves its targets.

Third, midstream matters more than upstream. Mining capacity is

building; the binding constraint is increasingly separation, refining

and downstream processing. Brazilian strategy has correctly identified

this and the Viridis-Ionic hub, lithium hydroxide projects and

battery-grade nickel processing are the priority investments.

Fourth, relationships matter more than transactions. The Brazilian

critical-minerals projects that advanced most successfully during 2025

were those with strong, multi-year strategic-partnership structures —

DFC for Serra Verde, European industrial buyers for Sigma, potential

Japanese partners for Vale nickel. Project economics alone are no longer

sufficient.

A fifth, quieter lesson: speed compounds. The Brazilian operators who

moved early in 2025 on offtake negotiations, permit advancement and

capital-raising ended the year in materially stronger positions than

those that waited for market clarity. In a restructuring cycle, moving

before conditions fully stabilise is often the highest-value decision an

operator can take.

Outlook

The 2025 shocks will reverberate through 2026 and beyon

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